Spill panel leader says oil industry was complacent

JENNIFER A. DLOUHY, Copyright 2010 Houston Chronicle

Published
6:30 am CST, Friday, December 3, 2010

WASHINGTON — The oil industry and the federal government need to make major changes to boost the safety of offshore drilling, the presidential commission investigating the Deepwater Horizon disaster recommended Thursday.

Although the Obama administration has launched a reorganization of the federal regulatory agency that oversees drilling, the overhaul does not go far enough, commission leaders said.

And the industry itself must improve its self-policing by establishing an aggressive safety institute like one established by the nuclear power sector after the 1979 partial meltdown at the Three Mile Island plant.

"We have the chance to learn the lessons from this disaster in a way that the oil and gas industry is stronger, our workers safer ... and our environment more secure," said commission Co-Chairman Bob Graham, a former Democratic senator from Florida.

The April 20 blowout of BP's Macondo well off Louisiana destroyed the Deepwater Horizon rig, killed 11 men and triggered the nation's worst oil spill.

The seven-member commission's observations came Thursday during the first of two days of deliberations over the recommendations and findings it will deliver to President Barack Obama in January.

Commission Co-Chairman William Reilly stressed that the Deepwater Horizon explosion wasn't just an outlier event caused by a "rogue company." Instead, he said, the commission's investigation has "indisputably established that we have a bigger problem than that."

"We are not dealing here with a sick or a failing or an unsuccessful industry," Reilly said, "but with a complacent one."

On the Deepwater Horizon rig, workers didn't do enough big-picture analysis of risks, even as they encountered multiple challenges drilling the Macondo well, commission staff concluded. Instead of stepping back after overcoming obstacles or calling in experts onshore, workers plunged forward to the next challenge, panel staff said.

The three companies centrally involved in drilling and sealing the well - BP, Halliburton and Transocean - also didn't share enough information about the problems they were encountering, said Richard Sears, the commission's senior science adviser.

"Many decisions taken on the rig, one at a time, turned out to add to the risk of the operation" and cascaded in a preventable disaster, Sears said. "Better management systems at Macondo by these three companies certainly would have prevented this blowout."

Not fans of the proposal

Federal regulators and oil company leaders have been cool to the idea of an industry-led institute that would audit offshore operations and promote best practices and better risk analysis. Modeled after the Institute of Nuclear Power Operations, the new entity would complement federal regulators and focus exclusively on safety.

The critics stress the big differences between the relatively small nuclear sector and the oil industry. Where the nuclear institute inspects 104 units spread across 66 sites, the oil and gas industry comprises hundreds of operators, ranging from major oil companies like Exxon Mobil Corp. to small startups with just a few employees.

"Because it is a public resource that they are getting access to, (we should) be considering whether access to these high-risk areas actually depends on them moving forward on this," Beinecke said.

But even a robust safety institute won't take the place of stronger federal regulation, said commission leaders, and the Obama administration's overhaul of the agency that oversees offshore drilling falls short.

The administration carved up the former Minerals Management Service and separated its conflicting missions, overseeing drilling operations and collecting revenue from oil and natural gas produced on leased lands and waters.

But Reilly said the government may need to "construct an impenetrable wall" that keeps environmental and safety regulators separated from officials who sell leases.

In a draft recommendation, the commission suggests creation of a new agency in the Interior Department to focus on safety issues and environmental analysis.

That plan would require legislation by Congress.

In other discussion Thursday, the commission suggested its findings might include the need that oil and gas workers be trained "to repeatedly question data, raise concerns and double-check assumptions."